Succession Planning – The Unseen Ingredient to ERP Success

One reads widely on the importance of succession planning. So much so, some consulting organisations specialise in it. It is a critically important process for large corporate organisations, with General Electric often being the poster child of how to carry out this important process correctly.

They have been called the CEO factory. It is likewise very important in family businesses. However in a different sense to that for a publicly listed company. It is often a foregone conclusion who will follow on from the founder or current CEO and yet at other times, it can be a bloody family spat to decide who will follow on.

It is also a critical ingredient to ERP success. While many of you may be thinking this is a long bow to draw. However, one key success factor in ERP implementation is the ability to draw the most knowledgeable people away from their day to day business activities and have them concentrate on designing the new business process and have that process correctly configured in the new system.

When engaged to help put projects on the correct path to success, one of my very early questions in the conversation is; “Who can you not do without? Who are the most critical people to your business?” I ask this because; they are the exact people we need on the business system replacement project. And in almost every case the response I get is, “No we cannot afford to lose them for the period of time you are talking about.”

And this comes about because there has been little succession planning going on prior to the project’s commencement or consideration. Sound succession planning results in a clear line of succession having been identified and those in that line of succession have been trained and seasoned to enable them to take over whenever that time comes.

A key disincentive to having this succession planning in place and effective is, to have the person selected to undertake the project work feeling, “I wont have a job to go back to.” This is a clear failure of leadership. To have a situation where two talented people in the same department cannot find things to do to help the business grow is extraordinary. I have never seen a successful business with two outstanding people in a department not be able to make good use of both their skill sets. It is not a zero sum game. Successful ERP projects create greater capacity and growth for the organization. They create an environment where both these individuals can succeed and grow.

Succession planning is not a one off task or project. It is something that should be at the core of your business strategy. There is nothing more strategic for a CEO to worry about than the ability of the business to remain in business. An ERP implementation has the capacity to put that very survival at risk. I read a statistic somewhere (I cannot remember where, I really wish I could) that stated, 85% of © David Ogilvie 2018 Page No. 2 companies that experience a serious IT failure are no longer in business after 5 years.

A major disruption to your business’s ability to deliver goods in full and on time is a serious risk to your survival. It would be a shame to put the business at this risk during an ERP implementation all because there was a failure of genuine succession planning on your watch as CEO. If your core business system is 10 years old or greater, the prospect of you having to replace it soon and on your watch as a senior executive is very high.

If this is you, then you need to start to reduce your risk by taking two actions; 1) start succession planning for your key people now. An ERP replacement program will need them. 2) give me a call for an genuine chat about what you need to have in place to reduce your risk when you decide to commence your core business system replacement.

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David Ogilvie

PO Box 1931
New Farm QLD 4005

About David
Experienced independent business consultant with a speciality in ERP to manufacturing, warehousing and distribution businesses in Australia, New Zealand and the United States, with a turnover of $20 million+.
Services
  • Business Strategy Facilitation
  • ERP, WMS & CRM System Evaluation & Selection
  • System Implementation Support
  • Supply Chain & Inventory Optimisation
  • Process Enhancement
  • Project Governance & Advice

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